Call Kurtis: Why Did A Clothing Store Charge A Living Wage Surcharge?

ROSEVILLE (CBS13) — Walking out the door, Jeanette Dutton checked her receipt after buying clothes at Crossroads Trading Company in Roseville. She was stunned to find a living wage surcharge of two percent added to her purchase.

"I was a little confused, and then I was a little angered," she said.

Dutton wondered if it was a new tax that she was not aware of, that rolled out with the first of the New Year.

She was curious, "So I started looking into it, and I was like wow. It's just at this place; I said let's call Kurtis."

The retailer, Crossroads Trading Company, sells new and used clothes it buys from customers.

We went undercover to see what this surcharge was at Crossroads.

When our producer gets to the register, she sees sign notifying customers of the living wage surcharge.

After making the buy, she asks about it.

Producer: "I'm just curious. What's the 2-percent living wage?"

The clerk tells us the company added the charge last year.

Clerk: "To compensate our employees a competitive living wage, we instead of raising the prices like Walmart or Target or any other place that you shop at around us do, we just added the 2 percent...."

Retail Consultant Harry Friedman says the tactic makes no sense whatsoever. He says it is a clever and silly marketing ploy and recommended that the store should just raise its prices instead of adding a 2 percent tax.

Friedman says it could cost Crossroads its customers, "They will vote, and they vote very strongly by either coming back or not coming back."

We reached out to Crossroads, which confirmed they charge the 2 percent living wage at 35 of their stores.

Crossroads told us in a statement, "We agonized over this decision because we would much rather simply fold the cost increase into our prices but are unable to."

Because it is a resale company that buys clothes from the public Crossroads says, "We are unable to apply consistent price increases across the board."

Dutton thinks the company should just increase their prices and says it may have cost Crossroads Trading Company her business.

"I might consider going somewhere else," she said.

Crossroads says it only adds twenty cents for every ten dollars spent. They confirm that all of that money goes to its workers.

We checked with the State Board of Equalization, which told us there is no law against adding this charge.

Who else in town is passing on this living wage surcharge to customers?

Locally we did not find any other clothing stores charging this living wage, yet some bars and restaurants have started to add the surcharge.

CROSSROADS CLOTHING COMPANY
"WHY DO SOME STORES HAVE A LIVING WAGE SURCHARGE? WHY NOT JUST INCREASES PRICES LIKE OTHER BUSINESSES?"
https://crossroadstrading.com/faq/